Sri Lanka hikes import tax on potatoes
ECONOMYNEXT – Sri Lanka has hiked the tax on imported potatoes to 55 rupees a kilogram with effect from August for four months, a Finance Ministry gazette notice said.
The tax is charged as a special commodity levy para-tariff.
From August 15, the tax would go up to 55 rupees a kilogram from an earlier 50 rupees a kilogram.
Sri Lanka’s potato farmers have been given protection for years and are promoted as an export non-competitive product who are able to charge higher than market prices from the public with the help of the tax.
Onion farmers are also given protection.
Potato and large onion cultivation was ironically promoted during the early 1980s as the country re-opened the economy without reforming the central bank and monetary instability worsened, triggering steep currency falls and inflation levels of over 20 percent.
The economy was progressively closed from around 1952 after a soft-pegged central bank was set up by an Federal Reserve official under the philosophy of its Latin America department. (Colombo/Aug22/2020)